Professional Liability Insurance (PLI) is insurance which covers professionals against negligence, malpractice, misrepresentation and other claims initiated by their clients. This kind of coverage is important for professionals who have expertise in a specific area (e.g., lawyers, accountants, graphic designers) as general liability would not cover them for the reasons previously mentioned.
Professional liability insurance helps cover claims of:
It is important to stay covered because even if you feel you have done nothing wrong, your client can still sue your business if they believe you have made a mistake. Without this coverage, you could be responsible for the total amount of a claim and out-of-pocket legal defense costs.
It is also important to remember that professional liability insurance does not cover everything. For example, it will not help your business with the following claims:
Many types of businesses need professional liability insurance and some states may even require it.
You should consider getting a professional liability insurance policy if you:
You sign an agreement with a client stating you will carry this coverage